German utility RWE has agreed terms for the sale of its oil and gas production arm RWE Dea AG to investment firm LetterOne Group for an enterprise value of around EUR 5.1 billion.
The companies have also agreed on the major contractual conditions for the deal, which is expected to close later in 2014. The transaction will be subject to the approval of the Supervisory Board of RWE AG and of authorities in several countries.
"This agreement is a major milestone in delivering our announced strategic realignment of the group. In addition, it is a further and essential step towards improving our financial strength," said Peter Terium, CEO of RWE AG.
RWE with rivals GDF-Suez and E. ON has dominated Europe's power market for decades, but now the growth of subsidised renewable energy has undermined their traditional business models. Earlier this month RWE posted its worst results in more than 60 years - a net loss of EUR 2.8 billion. It now plans to shift its focus to decentralised energy and services.
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